U.S. stock futures rebound ahead of Wall St open

Wholesale prices fall unexpectedly in May

AnoraMahmudova

NEW YORK (MarketWatch) — U.S. stock futures shook off earlier gloom and edged higher shortly before the market open on Wall Street.

Investors were cautious in light of the growing conflict in Iraq and ahead of consumer-sentiment data.

Intel Corp. and Express Inc. were among stocks gaining in premarket.

Stock futures for the Dow Jones Industrial Average
US:SPU4
rose 12 points to 16,690, while those for the S&P 500 index
US:SPU4
picked up 2.7 points to 1,925.90. Futures for the Nasdaq-100 index
US:NDU4
gained 10 points to 3,774.5.

A thin economic calendar for Friday included producer prices for May, which fell unexpectedly. U.S. wholesale prices sank a seasonally adjusted 0.2% in May after two straight large monthly gains. Excluding the volatile categories of food, energy and trade, core wholesale prices were flat, the Labor Department said Friday.

Even if Wall Street can manage to shoot higher on Friday, it may not change the downward trend that’s been seen all week. The S&P 500
SPX, +0.64%
which dropped 0.7% to close at 1,930.12 on Thursday, is headed for a loss of about 1% for the week. The Dow industrials
DJIA, +0.45%
are set to lose more than 1%.

Thursday’s losses were tied to a spike in oil prices, which weighed on shares of airlines, but also reflected retail sales and other economic data that came in below expectations. Oil prices continued to push higher on Friday, with July Brent oil
LCON4, -0.25%
tapping above $114.69 a barrel in early European trading, before pulling back.

The Iraq conflict widened on Friday, with media outlets reporting that militants have seized two new towns, advancing into the Diyala province in the east near Iran and closer to the capital of Baghdad.

A string of recent selloffs for U.S. markets underscores investor caution at the moment, said Alastair McCaig, market analyst at IG, in a note.

Bloomberg

“This certainly isn’t the time for an all-out move into equities, but already some cautious buying in selected names is being seen, as some begin to bet that this is the latest dip that will offer a sensible entry point,” said McCaig. “Corrections don't come when everyone is looking for them — they appear at unexpected moments.”

While stock futures were holding up, European marketsSXXP, +0.00%
were in the red across the board, as higher oil prices weighed on shares of airlines in Europe. In Asia, the Nikkei 225 index
NIK, +2.28%
rose 0.8%, brushing aside Iraq worries, while the China Shanghai Composite Index
SHCOMP, -0.18%
rose 0.9% after data showed lending surged in May. Chinese retail-sales data also beat forecasts. See Asian stocks live blog recap

In other markets, the British pound
USDGBP, -0.0254%
pushed higher against the dollar after spiking the prior day on comments by Bank of England Governor Mark Carney, who said the first rate hike in the U.K. could come sooner than expected. Gold pricesUS:GCQ4
were marginally lower.

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